curiousgirl's playground

I'm truly impressed by Janice Fraser, one of the founding members of Adaptive Path. She is an entrepreneur, interaction designer, and editor -- all in one! She writes an inspirational blog (hah, she's "clevergirl") and has an excellent podcast here.

• Partnerships (people) are most important. It's all comes down to trust. Adaptive Path's success is due to the solidity of the seven co-founders. Janice talks about her great relationship with Peter Merholz, President of Adaptive Path, and how even if they did get it into conflicts (ps: constructive discontent is always healthy), the conflicts would be meaningful.
• Make meaning. Not just in the Guy Kawasaki's "Let's Change the World" kind of way. Janice stresses creating meaning for your employees, making sure they want to be there and are 100% passionate.
• Be stingy.
  • Financially. The founding members of Adaptive Path spent 6 months arguing over whether or not to buy a printer and lived without an office for a year.
  • On features. Less is more. Each additional feature = extra expense = additional design, development, testing costs.
• Alignment = Integrity. Hire for the right characteristics in people. The right people will create the right product vision. The right product vision gets you the right customers. My questions for Janice are: What exactly does "right" mean? More importantly, how do you know what is "right?"
• Companies are designed for people. Firm culture is critical. Janice says, "If work is not fulfilling, people will not have loyalty." What I admire most about Janice is her brutal honesty. She's not afraid to admit "she's human" and makes mistakes, too. As CEO, Janice says she "has no power" and instead must empower others around her. She cites a specific example with a newly hired PR person where she took more control than she was supposed to. This PR employee approached her about it, and she accepted the feedback and immediately apologized and let go. For Janice, her employees are her partners.
• You are employed by an industry, not a company. Think about the bigger picture. Take the long view.

technorati tags: janice fraser, adaptive path, design, ceo, entrepreneurship

August 5, 2007 | 4:48 PM | Comments (1)

I came across a great Fast Company article titled "Strategy by Design" by Tim Brown, CEO of IDEO, written back in June 2005. Tim emphasizes the importance of design thinking as a catalyst for innovation productivity. "Where you innovate, how you innovate, and what you innovate are design problems."

1. Hit the streets. Go out there and be observant. Get original insights from your market.
2. Recruit T-shaped people. People with breadth and depth. Expertise in one area that can be applied to many disciplines.
3. Build to think. Focus on problem solving. "Design thinking is inherently a prototyping process....The goal isn't to create a close approximation of the finished product or process; the goal is to elicit feedback that helps us work through the problem we're trying to solve."
4. The prototype tells the story. Generate feedback and make corrections. Visually describe your strategy.
5. Design is never done. We live in a changing world. "The market is always changing; your strategy needs to change with it. Since design thinking is inherently rooted in the world, it is ideally suited to helping your strategy evolve."

• Is design often overlooked? Even in my undergraduate computer science courses at Penn, I've remembered that the "specification" phase was often rushed through or , worse yet, done -after- the coding was completed.
• How easy is it to sell design? Of course, from a business perspective, people like to see numbers and quantify the value of a feature, project, idea, etc. Adaptive Path has taken a look at this issue by applying ROI methodology to user experience design, ensuing that companies are only investing in high-value projects. The truth of the matter is that it's almost impossible to appropriately capture all the "value" derived from design and user experience. If this is the case, how do design consultant shops effectively pitch to new clients who don't recognize the benefits of design thinking?
• Design thinking is here to stay. Just watch the trends. Emerging design schools (Stanford's d.school and Copenhagen Institute of Interaction Design). iPod/iPhone phenomenon. Google and importance of simplicity. Less is more. "Web 2.0"-style design.

» Interview with Tim Brown, CEO of IDEO (by Brandon Schauer of Adaptive Path)

technorati tags: design, design thinking, design strategy, ideo, tim brown, business, innovation, adaptive path

August 5, 2007 | 1:12 PM | Comments (0)

My recent conversations with my friend Doug has got me thinking more about our information overloaded society and how people can best find what they want or "separate signal from noise" be it on the internet, in the real world, etc.

In particular, we were talking about finding "good quality" topical blogs. While blogging has enabled mass participation from everyone, it has also made the entire universe more cluttered, crowded, and hard to filter through. You always get the good with the bad.

Like what happens in mainstream media, it seems that a few, key influential blogs (either by an individual or group of bloggers) have a widespread effect on the content on all posts across different subsystems of the blog world:

• In tech: TechCrunch, GigaOM, Read/Write Web, Mashable, Engadget, or individuals like Don Dodge...
• In VC blogging world: Brad Feld, Fred Wilson, Guy Kawasaki, Lightspeed Venture Partners ..

• Is "long tail" content less unique because of these influential few?
• Is "long tail" content really driven by the "few" or vice versa? Or both?
• How do we truly separate signal from noise at a more micro level? Can this process be at all automated, or do we need a real person to ultimately assess "quality?" Sure, there are sophisticated techniques of determining quality of sites, but can this be translated down to a post level? Just like a great author who may write a "bad" book, a great blogger can have some "bad" posts.

There are sites out there already that helps us filter information: vertical search engines, social bookmarking (digg/reddit), etc. Even in the real world, we see the same filters: New York Times' Bestsellers, Zagat guide, etc. However, what if I don't want to read what everyone else is reading? What about finding the hidden gems inside the "long tail" (e.g. those blogs who have not yet established high authority or rank on Technorati, new authors, etc..)? Or better yet, do we need to do anything at all? In theory, a "good" blogger over time should be able to rise in the ranks (e.g. of Technorati, etc.) as more and more people "discover" his/her content. (Hah, quick financial analog: A undervalued stock who's price has finally returned to "fair" value.) The problem is that, if the blogger is not active about "getting known and out there," this process can take a really long time. And time is what we -don't- have these days. Hmm..there should be some way to speed up this process.....

technorati tags: influence, law of a few, blogosphere, long tail

July 8, 2007 | 7:38 AM | Comments (0)

Yesterday, I had the pleasure of meeting one of my favorite VC bloggers, Ho Nam, General Partner and co-founder of Altos Ventures on the famous Sand Hill Road in Menlo Park, CA. Ho's posts are always very insightful, thoughtful, and well-written --- full of inspirational or witty quotes, personal anecdotes, facts, and opinions supported by solid business fundamentals.

Ho's blog is the first I've seen that actively applies the principles of Warren Buffett and value investing to venture capital. This struck me as unusual. Why? Because they tend to be very different. It's like apples and oranges. Here are the major differences I see --

1. Diversification - Where do you put your eggs? The conventional VC business model (which Ho calls "Venture Lotto") involves investing large sums of capital in a lot of different startups in hopes of one mega-hit (e.g. a Google) to cover all the other losses. On the flip side, Buffett follows the words of Mark Twain: "Put all your eggs in one basket, and watch that basket!" He prefers large, infrequent bets where the odds are in his favor.
2. Time horizon - "Buy & Hold Forever" vs. "When Can I Cash Out?" VCs care a lot about exits and multiples. So does Wall Street. (This is only re-emphasized in the "Finance of Venture Capital" class I took at Wharton with Professor Andrew Metrick.) The numbers matter a lot more than the underlying business (the qualitative factors). Buffett, on the other hand, invests for the quality and long-term sustainability of the business based on economic factors, business model, strength of management, etc. Hence, his favorite holding period is "forever."
3. Industry - What's your favorite? Buffett avoids technology completely. He sees the industry as "speculative" and doesn't believe anyone can "predict the future." As a result, he preaches investing in businesses you know and understand well or staying within your "circle of competence." Meanwhile, all the VCs in Silicon Valley largely invest in technology or just growth.

It was through reading Ho's blog and speaking with him in person that I've come to realize that these two camps are actually very similar. At the end of the day, there are common principles of what makes good, sustainable businesses. That being said, I feel Altos Ventures positions itself very well in terms of applying these fundamentals to its venture investments, focusing more on those "qualitative" factors and making more careful investment decisions rather than throwing money out randomly and "seeing what sticks."

What I really wonder, is how likely these kind of unique opportunities actually exist in today's world (compared to the time Buffett invested)? With the rise of internet, information and knowledge is much more readily available and more "free." Is it much harder to "know more than the market" compared to the past? While Buffett relied on his newspapers and didn't believe a computer program could make sound investment decisions, I would say that with the added aid of technology, it's now possible for a Buffett-type investor to not only acquire more information (e.g. interesting / niche content, annual reports, etc.) at a faster rate but also interpret that information. For instance, today's value investor may use software to draw diagrams on financial data and see trends (e.g. illustrating the facts on the computer) and then use the increased information (from news sources, blogs, etc.) to assess the qualitative factors of the business. This way the data reading and opinion formation of the investor is still separated.

• Technology and growth can be your "circle of competence." While these sectors have far more unpredictable futures, Ho pointed out that it is possible to be a true industry expert, understand the business, and see future trends. He pointed out the extraordinary track record of now angel investor Andy Bechtolsheim, one of the early investors in Google. Andy's hit rate beats that of many VCs. While this may be possible, I wonder if visionaries like Andy (and Steve Jobs) are the just the more exceptional and rare cases.
• Be interested. Curiosity is the first step. More important that "being interesting."
• Do more thinking. Ho tells me doesn't read blogs or newspapers that much anymore. "How often do we stop to just think?" he asked.
• Try to eliminate / cut down on the things that waste time. Ho tries to avoid constantly checking email. He hates his Blackberry at times.

Concluding Thought: Does a "good" business necessarily have to have "long-term" sustainability as Buffett seems to look for? What if you are just doing well in the shorter term (5, 7, 10 years out)? Perhaps things change because of consumer preferences or just some other disruptive technology. In other words, is it necessarily "evil" that people are overly concerned with exits (short term gain)?

technorati tags: ho nam, altos, venture capital, value investing, warren buffett, buffettology

June 26, 2007 | 4:50 PM | Comments (0)

What is it? How do startups get ahead of customers? How and when do startups execute on strategy? What happens if your strategy fails?

• Know your customer; be a customer. Try to find a few key customers who might just tell you what they want and then go build that (Reminds me of “Law of a Few” from Malcolm Galdwell’s Tipping Point). What influences your customers? What do they care about? Above all, be passionate about your product. Use it. Test it. Tinker with it.
• Master storytelling. Why should anyone (e.g. your customer, Wall Street analyst, public relations, etc. -- your constituents) care about your product?
• Perception is key. People expect things to work. If something is in “beta” stage, it better work. Underpromise and overdeliver.
• Flexibility is crucial. Have a plan but don’t be afraid to tweak it.
  • 50% proactive - Knowing your strategy
  • 50% reactive - Understanding what market is saying and reacting to feedback
• Failure is OK. In fact, fail over and over again. Don’t be afraid. You learn more from your mistakes.

Panelists: Alex King (Crowd Favorite), Brad Feld (Mobius Venture Capital), Don Loeb (Feedburner), Dave Taylor (serial entrepreneur and consultant)

Should all startups blog? Must they do so nowadays to gain critical mass?

• Free marketing. Blogs can serve as a great way to spread the word about your product and company. Huge viral and network effects.
• Be coherent and consistent. Keep blogs focused on specific topics (e.g. separate personal and company blogs).
• Be thoughtful. Have your own insight and opinion. Do more than copy or reiterate what’s already out there.
• Have domain expertise. What is your unique contribution? Brad Feld asked one question to the eager founders of the room: “What can we be best in the world at?”

While Brad Feld argued for complete transparency in blogging, I feel companies ought to exercise caution. While blogging may be especially beneficial for consumer-oriented internet startups in "spreading the word," it also is a source of competitive intelligence. One interesting point that was brought up was whether or not companies should blog about a "roadblock" they've encountered. Another point was whether or not young people today should be worried about what they are blogging about online. In other words, can the words you say now (e.g. say as a teenager using MySpace or Facebook) be used against you later (e.g. for a future job position)? Since perception is so important, one negative first impression can ruin the future image of the brand (or person).

technorati tags: techstars, go-to-market strategy, blogging, startups, marketing, getting started

June 14, 2007 | 10:41 AM | Comments (0)

My trip has been amazing so far. First off, Boulder is absolutely gorgeous. Here are some of my favorite perks about the city:

• Perfect weather. I’m biased since my family is currently in the Bay Area of California, but think Seattle summer. Clear blue skies, clouds, moderate temperature. Not too cold, not too hot. You can wear anything you want.
• Very outdoorsy. Great for hiking, biking, camping, skiing, running, whatever else you can think of. There are always cyclists and pedestrians on the road. Seeing people in a suburban town is a wonderful feeling!
• Happy, friendly people. I think this is a result of the weather, but everyone is nice. Talk to any local barista of the many, many coffee shops around the area. Feel free to ask a stranger for directions somewhere. Or talk to the lady who works in the Boulder Bookstore. They are all personable and easy going. I love the laid back attitude of everyone here.
• Easy to navigate. Because I recently lost my wallet, I wasn’t able to rent a car, but this hasn’t been a problem at all for me. The Pearl Street Mall (downtown Boulder) is just four streets away from me. Everything is within walking distance, giving me the opportunity to really appreciate and enjoy the weather in the mornings when I go out.
• Other random facts. Did you that more than 50% of city has college education or better? One of the best places to retire.

In addition, I’ve thoroughly enjoyed all the conversations I’ve had with the founders of the TechStars teams. I love meeting new people and hearing their thoughts and ideas. I could immediately feel the excitement and energy of the founders just from short conversations with them, making me more eager to see the results of their hard work. All of them have been working on some very interesting, exciting, cool ideas. Unfortunately, most of them haven’t been getting too much sleep… For instance, my friends on the LingoLinko team have had crazy schedules (e.g. sleeping at 7am and waking up at 12noon). I’m amazed by everyone’s energy ….

I’m heading out of Boulder this afternoon. Thanks to David Cohen for letting me crash TechStars for a few days. Also, special shout out to Ben Casnocha for making my trip even more amazing and introducing me to more entrepreneurial people in the Boulder area!

technorati tags: techstars, boulder, colorado, david cohen, startups, entrepreneurship

June 12, 2007 | 9:06 PM | Comments (2)

Cover story in June 2007 edition of Smart Money:

• Having $1 million is no longer enough. Today, 1 in 12 U.S. households has at least $1 million stored in home equity and other assets. To enter nation's top 1%, you need > $5 million. Even then, there are ~930K in this category.
• Members of the nation's $5 million plus club share common characteristics.
  • They are active wealth creators. It's not enough to just put in $1K a month in your 401(k) plan at 7%. Though you will end up with $1 million adjusted at the end, you are still dependent on your annual salary and your daytime job.
  • They have a positive, can-do attitude. Follow your gut even when others might tell you otherwise. Utter persistence.
  • They are dedicated and passionate people. "Money . . . wasn't much of a motivator. Once you've got food in your belly and a big-screen TV, the mere prospect of more Benjamins probably isn't enough to get you leaping out of bed at 5am. Rather, rich folks often make their fortune after they make up their minds to solve a problem or do something better than it's ever been done before."
  • They come from more modest backgrounds. Only 10% of nation's $5 million plus club inherited wealth. Mostly came from working to middle class families and graduated from state schools.
• "Being rich means freedom: to spend your time as you please, to pursue your real interests, and to take a chance without risking utter ruin. Paradoxically, the road to riches often means acting as if you already have that freedom."

Seven factors of millionaires from Millionaire Next Door

1. They live well below their means.
2. They allocate their time, energy, and money efficiently, in ways conducive to building wealth.
3. They believe that financial independence is more important than displaying high social status.
4. Their parents did not provide economic outpatient care.
5. Their adult children are economically self-sufficient.
6. They are proficient in targeting market opportunities.
7. They choose the right occupation.

1. Understand the key success factors our economy continues and will continue to reward: hard work, integrity and focus.
2. Never allow a lackluster academic record to stand in the way of becoming economically productive.
3. Have the courage to take some financial risk. And learn how to overcome defeat.
4. Select a vocation that is not only unique and profitable; pick one you love.
5. Be careful in selecting a spouse. Those who are economically productive married husbands or wives who had the characteristics that are compatible with success.
6. Operate an economically productive household. Many millionaires prefer to repair or refinish rather than buy new.
7. Follow the lead of millionaires when selecting a home. Study, search, and negotiate aggressively.
8. Adopt a balanced lifestyle. Many millionaires are "cheap dates." It does not take a lot of money to enjoy the company of your family and friends.

technorati tags: 5 million plus club, millionaire, factors for success, millionaire next door

June 6, 2007 | 1:36 PM | Comments (1)

Thanks to my friend Solomon Bisker for the link to this BusinessWeek article, "Are Designers The Enemy of Design?" by Bruce Nussbaum.

• Design is our future, our life. Not surprising. See 2007 Top Jobs.
  
  
  "Over the past decade, design has evolved to become an articulated, formalized method of solving problems that can be widely used in business—and in civil society. Design’s focus on observing consumer/patient/student—human behavior, it’s emphasis on iteration and speed, its ability to construct, not destruct, its search for new options and opportunities, its ability to connect to powerful emotions, its optimism, made converts out of tough CEOs. AG Lafely at P&G, Immelt at GE and many others embraced design. Now Mayor Daley of Chicago and Mayor Livingstone of London are embracing it."
  
  
• Design democracy is the new norm. People want to participate in the designing of their own lives (examples cited: MySpace, iPod, blogs, fashion, Starbucks..). They crave customization, personalization, individualism, and freedom to do whatever they want. They want to feel special, be different, be in control of their lives.
• New age of creativity and collaboration. The world where everyone will need to work together (a world where MBAs meet artists meet medical doctors meet investment bankers meet engineers).
• Knowledge and skills are not enough. "The commoditization of manufacturing and knowledge and its outsourcing to Asia, left US companies unable to compete to make profits." Companies need real innovation.

I see this even in everyday life activities. I'm on vacation with my family in Europe until the end of this month. Just this morning, as we were about to eat lunch, I asked my younger brother Kevin to go to the kitchen for some freshly cooked fried rice. He responded saying, "No, Jing, we've been having rice for the past few days. Why not switch it up a bit? I want some fish fingers ..."

technorati tags: design, design democracy, future, change

May 19, 2007 | 7:10 AM | Comments (0)

Last weekend (May 5th-6th), I had the opportunity to attend the 2007 Annual Berkshire Hathaway Shareholder's Meeting in Omaha, Nebraska. (No, I'm not a shareholder, but a group of us were able to get tickets thanks to knowing people who were shareholders.) A quick summary:

• 27,000 attended the event from all over the world
• All the hotels/motels were completely booked. (We actually didn't have a place to stay Friday night so "camped out" at the Hilton across from Qwest Center.)
• Doors opened 7am Saturday morning, but lines started at 4:30am. Earliest person who arrived, Jerry Brunetti, arrived 8pm Friday evening.
• Then picture a stampede of people RUNNING for seats at 7am. (We got 3rd row center. Thanks to Theodore's amazing agility and speed!)
• "Berkstock" video highlights
  • "Woodstock"-style cartoon
  • Buffett vs. Cleveland Cavaliers' LeBron James
  • Buffett vs. 12-yr-old Ariel Hsing in table tennis
  • Tribute to "Berkshire Managers" to tune of "My Favorite Things" from Sound of Music
  • And, of course, various ads from Berkshire portfolio companies
• 5-6hr Q&A session with Buffett and Munger highlights
  • "I have nothing to say" and "I have nothing else to add" -- Charlie Munger (a man of few words...very concise)
  • Buffett: "Envy is the worst of the seven deadly sins...because you only feel worse. ...There are definite upsides to gluttony" [Buffett takes piece of See's peanut brittle from table] ..."and lets not get into lust."
  • Buffett (paraphrased): Always marry up. Find someone who make you a better person. The catch is you need to find someone who is willing to marry down.
  • Buffett & Munger in response to ("How does a 10-yr-old get rich?"): Read everything you can get your hands on. (By age 10, Buffett had finished all investing/finance books in his local library..twice! Oh and he sold newspapers.)
  • Munger on heroes: “You are not restricted to picking living people as your heroes. Some of the best people are dead.” (Think Ben Franklin..)
  • Noteworthy links: 1) Stockholders' questions summary 2) Ultimate 2007 Berkshire Hathaway Annual Meeting Guide

technorati tags: berkshire hathaway, warren buffett, charlie munger, 2007

May 11, 2007 | 9:05 AM | Comments (2)

technorati tags: ram charan, globetrotting consultant, work life balance, happiness

April 26, 2007 | 11:02 PM | Comments (2)

Last week, I had the opportunity to attend the 2007 Wharton Economic Summit. It was definitely a great conference featuring several amazing panels and distinguished world class leaders! Below are some highlights:

• CRT: Communication. Renumeration. Transportation. Particularly in apparel / retail industries ($400 billion global apparel industry)- Trends include faster lead times, quicker product development, better quality / quantity.
• Why China? Not least expensive but -most efficient-. Abundance of raw material.
• Current Stats: In 2006: $232.5 billion US deficit (up ~15%). US exported $53 billion to China (up from $42 billion in 2005). China helped lower inflation in U.S.
• Still low penetration of outsourcing.

  	Business Process Outsourcing (BPO)	IT (ADM)	IT (Infrastructure)
  Model	Captive (moving to hybrid)	3rd party outsourcing (moving to hybrid)	Outsourcing model
  Industry	$18 billion	$30 billion	$2 billion
  Percent Offshore	12%	>30%	~1.25%

• Software Service Providers: >20K employees

  2005 Data
  China	8,000 (~5K employees)
  India	5,000 (~15K employees)

• India faces talent crunch by 2010.
• Client vs. Delivery Markets

  Client Markets (United States)	Delivery Markets (China)
  Competitive pressures Industry nuances / maturity Exchange rate / currency strength Local political climate Wages Investment in education	Governance Political climate Infrastructure Exchange rate / currency strength Population and demographic profile Wages Investment in education Maturity of domestic financial markets

• Challenge: move up value chain by changing engagement model for BPO
• Challenges in India: 1) Communication semantic (3 ways to say "yes") 2) HR Management: need for non-monetary incentives (e.g. invite employees and their parents over) 3) Unpredictable government policy 4) Rampant corruption 5) Property value
• Why Bother with India? 1) Huge consumer market 2) Professional management has depth 3) Labor laws flexible in some industries 4) Tax benefits may be as important as labor cost arbitrage 5) Things are fine as long as you don't deal with government 6) Improved regulations on transfer of capital

• 10 Forces flattening the world. New age of creativity, connectivity, work flow software, outsourcing, etc..
• Globalization of labor-intensive industries. Supply chains are longer and more complicated, spanning countries. No longer a singe country-to-country interaction. International obstacles such as tariffs and trade agreements exist. Movement of labor supply to "cheapest" country: Hong Kong (1970s) -> Taiwan -> Korea -> Philippines -> China -> Bangladesh / Pakistani -> What next?
• Four tips for success.
  1. Have a clear vision and purpose. Requires having core values of character, trust, integrity with your customer.
  2. Know your representatives. Hire the best and brightest people on your team.
  3. Keep strong internal communication. Listen to clients and be problem solvers. Be at least 2 years ahead of the game.
  4. Control your expenses. Anticipate market changes. Use technology efficient to manage your resources.

• Be true to yourself. Particularly when it comes to reconciling personal values with corporate ethics.
• Great leaders have a moral compass. In response to the corporate scandals of America (Enron, MCI Worldcom, etc.), Huntsman greatly emphasized the importance of taking responsibility and being accountable for your own actions, saying that we know what is "right" and what is "wrong" -- all of us are taught those core principles.
• Don't be scared to speak up. Question authority. Be brave!

• Find "shrinking" markets. In looking for opportunities, Josh mentioned looking at crowded markets and trying to "shrink" them. Perhaps by fundamentally changing the business to squeeze out competitors?
• There's value in delayed gratification. Self-discipline for one. Robert told this story of how he teaches his own children about personal finance by giving them money (e.g. $1000) but not allowing them to use it right away. Instead, he works with his kids to pick out stocks and invest the money for the future.
• Get fouls. Josh made the analogy to basketball, saying that a great basketball player isn't "perfect" but is willing to take some risks (not play safe) in order to improve. Josh illustrated this point with his creative marketing strategies Half.com first employed when they got started. They actually got a town in Oregon to change its name to Half.com for a year. A small initial investment which led to millions of free mainstream media advertising!
• Focus on incremental change. These are opportunities that are easier to spot and execute.
• Use the business model as competitive weapon. Emphasize innovating on the -business model- rather than -the product-. Recognize different distribution systems for a given product. Answer "how can we make money" first. Cases like Google are rare.
• Get a board of advisors. As an entrepreneur, it's vital to seek the expertise of those around you.
• Think ahead and don't abandon ship too soon. Risk management and execution are key. Think of playing chess and considering 6 different scenarios playing out and how you would respond to each.
• Acknowledge what you don't know. You aren't expected to know everything. It's OK to say "I don't know."
• Open source dramatically reduces cost for business launch. For Josh, Half.com required $2.5 million investment --> Turntide required $750,000; and 1-800-Free411 required $300,000. Josh's thoughts on open source: "More businesses are failing more efficiently."

technorati tags: wharton economic summit, leadership, business, ethics, india, china, globalization, outsourcing, entrepreneurship

April 18, 2007 | 11:30 AM | Comments (1)

In light of some of the recent billion dollar transactions, Don Dodge poses some great questions in his recent post "Deal or no deal? The psychology of making deals:"

• "Cisco could have acquired WebEx four years ago when the stock market valued Web-Ex at $600 Million. Why did Cisco wait four years and pay $3.2 billion?"
• "DoubleClick was a publicly traded company two years ago and valued at less than $1 billion. Anyone could have acquired DoubleClick, but a private equity firm took them private less than two years ago for $1.1 billion. They later sold off two divisions for $525 million. Yesterday Google paid $3.1 billion for what remained of DoubleClick. Why did Google wait two years and pay billions more?"

• Think more, feel less. "Even the best executives sometimes succumb to emotion, competitive spirit, and ego in high pressure situations. That is when they over pay and make mistakes."
• Be patient! In contrast to the high-tech industry, "Warren Buffett made his money on boring businesses like insurance, manufacturing, retailing, consumer products. He never over pays for acquisitions and has a lot of patience for making his acquisitions pay off."
• Listen to your gut. After all the strategic and financial analysis, at the end of the day, someone must 1) name a price and 2) make final call on deal.

technorati tags: dealmaking, cisco, webex, google, doubleclick, acquisitions, warren buffett

April 18, 2007 | 10:31 AM | Comments (0)

• 2nd largest TV network in US (revenue basis): $7.07 billion in 2006
• #5 online ecommerce site (general merchant): in 2006, qvc.com generated $1 billion
• Reaches 90 million homes; 7.5 million unique customers
• Receives 341 calls/min
• Delivers 3.5 QVC items/sec
• Business divisions: Home (36%), Jewelry (27%), Fashion (25%), Beauty (11%)
• Target QVC customer: 85% female, affluent ($45K/yr income), educated, suburban, boomer (45-60 years of age), enlightened shopper
• 5K - 15K orders/hour from 500K - 1500K viewers/hour

• Our competitors sell air (commercial) time. We are control freaks. QVC has its own network and invites special "experts" or new inventors to come on the show and introduce their product for sale. Not only are the products more unique (not found in traditional retail stores) but they are also presented and sold in a more personal, intimate manner. QVC's TV network also enables them to do more measurable, 24-7 real-time tracking of customer behavior (e.g. when customers make calls to purchase, when customers are watching the show, etc.). Coupled with the increase of internet shopping, this enables QVC to better measure the effectiveness of their business and make changes.
  
  
  "Welcome to the department store that never sleeps."
  --- New York Times (12/7/04)
  
  
• "We are not about selling items. We are about pleasing customers.": This is the statement of Darlene Daggett, QVC's President of U.S. Commerce. QVC places extraordinary emphasis on customer service. Each phone representative at QVC receives 95 hours of training, including lessons on voice, tone, and pace.
• Strong company values: 1) Underpromise, overdeliver. 2) No artificial stimulants: no markdowns, coupons, discounts. 2) Strict confidentiality: no selling of customer names.

technorati tags: qvc, retailer

April 13, 2007 | 4:42 PM | Comments (0)

My friend Theodore King and I had the pleasure of meeting Chris Lehmann, principal of Science Leadership Academy (SLA), this past Wednesday morning. SLA is a new Philadelphia public school, which opened this past Fall 2006, focused on project-based learning and built on School 2.0 principles. SLA's five core values (inquiry, research, collaboration, presentation and reflection) are deeply emphasized across all its curriculum. Many thanks to Christian Long, CEO of DesignShare, for introducing me to Chris in the first place!

Chris graciously offered us a few moments of this time out of his busy schedule to discuss the making of his vision. In addition, Jon Amsterdam gave us a tour of the facilities. Below are some of the observations I made from the visit.

• Empower students! SLA loves each of its students as individuals. This is deeply reflected in its admissions process. Each interested candidate is evaluated separately based on academics, extracurriculars, interest in project-based learning, etc. and goes through a face-to-face interview process where students are assessed based on their presentation skills, interaction with the SLA community, etc. Consequently, admission is not biased to only students who are top academic performers. Instead, the admission process considers a breadth of very diverse, qualified candidates. For instance, if a student was not performing as well academically, he/she must justify their performance during the interview process and why they are interested in a place like SLA. Fit is what matters. While this approach may lead to a larger academic difference gap among classes (which may be more difficult for teachers from a teaching perspective), ultimately I think this process provides "balance" and the "right" mix of students. At the end of the day, you want to admit people who truly want to be there, and SLA's admission process does just that.
• Renovate traditional learning. SLA focuses on project-based learning with lots of interdisciplinary overlap across courses, so students can easily apply concepts learned in one subject to another. For instance, history teacher Mr. Matt Baird described the most recent project his students were working on. It was focused on the abolitionist period where students had to draft a letter in response to the Dred Scott decision. The students then use modern technology to create advertisements during that time period. In another project, they must research and collect stories on historic Philadelphia and later publish the material on a public website. This process allows the students to mix knowledge of history with other disciplines (arts, computers, etc.).
• Incorporate cutting-edge technology. Each SLA student has an Apple labtop. Classes run on open-source course management programs like Moodle, allowing students and teachers to more easily collaborate online via features such as virtual classrooms, gradebook, discussion forums, and file uploads. In addition, teachers can use blogs and wikis to communicate with students on a daily basis. Chris told us that they are now switching over to use Drupal. In particular, they are partnering with Bill Fitzgerald of OpenAcademic to build a standard for online collaborative learning for the new tech-savvy generation.
• Create a sense of community. Students actively participate in all activities from helping with the SLA admissions process (acting as "interviewers" and providing their own feedback on candidates) to making changes to open-source software (updating SLA website, upgrading features of programs, blogging). One example Chris mentioned was a student who had excellent academics (4.0) but was not admitted. When the parents asked why, Chris said that the student expressed arrogance in front of other SLA students during the interview process, saying that he was only applying to SLA as a "safety school." To me, this is an excellent way of assessing a candidate's "soft" qualities. After all, people do not reveal their "true" self during the formal interview process. Only by interacting with people in an array of environments and situations can you get a better understanding of what the person is actually like. By using this method of active student participation, SLA students gain a sense of responsibility for SLA and ownership of their work. They feel part of the SLA family. Even just walking around the school, Theodore and I saw the hard work of students proudly displayed on the multi-colored pastel walls (e.g. poster displaying complex carbon molecules in Chicken Nuggets and Mac & Cheese). Jon told us that the walls will soon be decorated with art murals. (This hit home for me. I actually replicated a famous painting for my elementary school in New Jersey. I'm hoping to visit my old school later this May. My principal, Mr. Mrozinski, told me that as long as he was still at the school (which he is), he'd make sure the picture was still on the wall. I wonder if it's still there ...)

Overall, the visit was very enjoyable and eye-opening. It's great to first hear Chris talk about his initial vision and then physically see, touch, and walk through it. I can't wait to see what SLA will be like a year from now.

View this Flickr set to see more images. I took some with my phone, but the quality isn't nearly as good!

technorati tags: science leadership academy, sla, philadelphia, chris lehmann, school 2.0, education

March 29, 2007 | 5:19 PM | Comments (1)

• Do you really understand the real need (sometimes unspoken need) of your customer?
• Can you give the customer what he or she really wants?

• Experience creators. They have renovated the entire end-to-end flight experience from the time you punch in your flight information at the kiosk to when you are at the gate to when you are sitting in your seat. The pastel colors of Song are carried throughout this journey (Song logo/backdrop at airport, airport Song gate design, flight chairs, etc). Even the diaper changing station of the plane has the words "oh baby!" (white text on blue) written on it.
• Brand the people. Song employees are not interviewed. They audition. People are taught "how to be Song." People talk about whether or not they are "Song" or how much "Song" they are. The company has turned "Song" into an adjective. (Like how Google has turned itself into a verb.) Are you "Song?"
• Introduce novelty. Song is an airline, yet it has publicized itself in completely innovative ways, methods people would not typically associate with an airline. For instance, Song has a concept store in Massachusetts (much like the Apple store) where visitors can stop by for a visit. They have run a series of ads - print and TV - to convey their brand. These ads typically feature real, happy-looking people. The created scene is often magical yet not surreal.

• Create a lovemark. Follow the advice of one of the greatest advertising agencies of all time, Saatchi & Saatchi.

  Lovemarks transcend brands. They deliver beyond your expectations of great performance. Like great brands, they sit on top of high levels of respect - but there the similarities end.

  Lovemarks reach your heart as well as your mind, creating an intimate, emotional connection that you just can’t live without. Ever.

  Take a brand away and people will find a replacement. Take a Lovemark away and people will protest its absence. Lovemarks are a relationship, not a mere transaction. You don’t just buy Lovemarks, you embrace them passionately. That’s why you never want to let go.

  Put simply, Lovemarks inspire "Loyalty Beyond Reason."

  
  

• It's all about relationships. Not just with your customer but with your friends, your boss, your boyfriend, your children, your dog, and even your stock portfolio. It's how you manage and understand these relationships that really matter. I suppose at the end of the day, the essence is understanding what it means to be human. What motivates people? What do they care about? What are their inner wants and desires? Why do they do what they do? What are their stories?
• Feeling > Thinking. "How do you think?" is on the outside. "How do you feel?" is on the inside. Getting to know the inside is what counts. How well can you read the inside?

technorati tags: song, airline, experience, experience marketing, customer, customer need, lovemark

March 26, 2007 | 4:13 PM | Comments (0)

Last Updated: 3/16/07

My friend Ravi Mishra wrote a post a while back about Wharton titled "Where Entrepreneurship Comes to Die" which gained quite a bit of popularity. While I agree that the herd mentality at Wharton is very strong (too strong I should say), this past year I've noticed a small, growing "underground" entrepreneurship community. I've compiled a list of startups I know of to date from Wharton. If anyone knows more, please and I will add to the list.

• Natpal: effective advertising for local businesses, started by Nathaniel Stevens (WH '06), BusinessWeek's Top 20 Young Entrepreneurs under 25
  Founded in 2004
• Eatnow: online food delivery service, founded by my friend Nat Turner (WH '08)
  Founded in 2005
• BoxMyDorm: making the college move-in/move-out process easy, started by Peter Handy (WH '08)
• CampusDock: online eBay for college students, started by my classmate Greg Morillo (WH '08)
  Launched in 2007
• Eduvo: a web-based school 2.0-powered learning management system (better than Blackboard), founded by my friend Theodore King (WH '09)
  Launching this Friday!
• Locobuzz: online guide for what's happening on campus (I am friends with Dan Zhou (SEAS '09), one of the developers for this site.)
  Launching very soon, still in development phase
• LingoLinko: online language learning community, started by Yi Li (SEAS '10) and Zhuang Sheng Quan (WH '10)
  Still under development

• Herd mentality at Ivy Leagues and other top institutions is too strong. Investment banking and consulting are still the traditional "tracks" people take. From being in my business fraternity, Phi Gamma Nu, I've seen too many Wharton juniors stress out about the on campus recruiting process. There are too many students competing for a few spots (internships especially), resulting in an unnecessarily competitive process. I'm not in any way saying these are bad jobs. I'm saying that people think that they are the only jobs out there in this world and that they will become a failure in life if they don't get it. Please read Ho Nam's (General Partner and co-founder of Altos Ventures) excellent article on "We're raising sheep in our educational system, not independent thinkers and doers." Consequently, too many students fail to explore all the opportunities out there. Perhaps there's a job they would love more? It's not that these opportunities don't exist. As my friend Peter points out to me, opportunities exist everywhere. The question is whether or not you 1) choose to see it and 2) take advantage of it. I see this applied in so many cases -- not just to the entrepreneur but also to the financial investor finding niche opportunities in the market that Wall Street misses. So, next time, don't think that you have no doors open to you after graduation. You got to first acknowledge that the doors exist or else you are just closing them on yourself. Then, don't just stand there. Open them!
• Entrepreneurs solve problems they are familiar with and see around them. Most of the above sites are either targeted at colleges or focus on education. For the two that have a School 2.0 bent, it's interesting to note that both have an international focus.
• The entrepreneurs are getting younger. The time to start a company is getting earlier. This, of course, deserves a link to one of my favorite posts by marketing guru, Seth Godin on "The Best Time To Start."
• Entrepreneurship exists everywhere around us. We just need to open our eyes to see it. When I was visiting colleges back in high school, I remember that a Berkeley student told me that Berkeley was actually not all -that- liberal. It was just that the liberals were more vocal and got heard more. To this, I say, that all the closet entrepreneurs at Penn ought to speak up!

Does your school have an underground community?

PS: On a related note, these underground communities come in all forms .. including fan clubs! I've met a handful of people at Wharton who are devoted Warren Buffett followers and true value investors. I've also met people who admire Paul Graham, founder of Y Combinator.

technorati tags: wharton, penn, entrepreneurship, startups, underground community, herd mentality

March 13, 2007 | 9:16 AM | Comments (2)

In my Wharton marketing class on advertising (one of my favorite classes this semester), our major group project for the semester is to create a new advertising strategy for Aquafina: identifying our target audience, what media vehicles to use, allocating budget expenditures, creating a few creative proposals on potential ad executions, etc. We have to produce both a final report and presentation. The top groups in the class get to present in front of Aquafina executives.

Date your consumers first. Then marry them. Get them to drink you all the time. The Aquafina lady said (I'm paraphrasing), "Advertising water is like a dating game. You first want to date your consumers. In the current water industry, because of little brand differentiation, it's like showing up to a party where everyone is wearing jeans and a black top. The question is, what happens if you show up with a white top? Will people think you are cool, or will you just come out to be a loser?

The point the Aquafina lady mentioned made me think more about what it means to be different. Being different can definitely pay off. Some companies even preach it: Apple's Think Different. On the other hand, if you are too different, you might just be going after a non-existing market with not enough consumer demand. On the whole though, I've seen a lot of examples lately where going against the "crowd" is a great strategy in finding precious gems of value. In other words, companies derive their competitive advantage by doing what their competitors aren't doing. My hypothesis is that this competitive advantage may not always be long lasting. When other companies react and respond to what you are doing, the value of that "difference" becomes diminished (e.g. Tag body spray has entered to compete head on with Axe. In fact, their campaigns are so similar that consumers have thought Tag was actually an Axe product, according to David Rubin, Director for Brand Development for Axe North America):

How to avoid losing competitive advantage? Be responsive to market conditions and never cease to innovative. In others words, be observant. Reflect, think, and react...quickly. Whatever happens. Just don't get too comfortable with the way things are.

technorati tags: aquafina, water, commodity, differentiation, competitive advantage, think different

March 12, 2007 | 3:03 PM | Comments (0)

I was reading Josh Kopelman's latest post "The Penny Gap" which highlights the difference between a "free model" vs "$0.01 model" (model that charges any type of premium) and how the first has allowed for greater viral adoption of a product/service (e.g. Kazaa / Napster in music during the 90s and his own Jingle Networks, providing free 411 calls).

Interesting consequences Josh mentions for businesses moving between these two models:

• From "Free Model" to "Penny Model": Getting users to pay anything at all is extremely difficult. Biggest "hurdle" to cross. Possibility of losing users.
• From "Penny Model" to "Free Model": Ability to disrupt/shrink an industry (e.g. take those who are charging out of the game). This idea is especially interesting - changing an industry business model (better, making it free) as a disruptive mechanism. I wonder if this is the question the true industry-shaking entrepreneurs ask: What would the world look like if .... were free?

• Which model is best for your business? This of course depends on the end customer of your product/service. Consumers are cheap and want things for free. Corporations, though, may be willing to pay premiums for a better product/service.
• What comes first? Users or the Business Model? I don't think there's a clear cut answer to this. However, from looking at cases such as Google/Facebook/MySpace and other consumer-facing Internet products/services, customer adoption is key. Customer adoption drives traffic hits which drive advertising dollars.

technorati tags: customer adoption, business model, free, premium

March 12, 2007 | 10:44 AM | Comments (1)